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28.06.2023 02:09 PM
Miners move record amounts of BTC to exchanges: how will this affect the bullish trend outlook?

Investor activity in the cryptocurrency market has significantly increased over the past week, and the main digital asset, Bitcoin, reached the $30k level. Currently, the coin is trading in the $30k–$31.5k range and has a good chance of continuing its upward movement to new levels. The positive fundamental and technical factors confirm bullish sentiment, which is necessary for an upward trend.

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However, in the long-term perspective, the cryptocurrency market faces strong restraining factors that limit the possibilities of upward movement for the main asset. The Federal Reserve meeting, where an interest rate hike is expected, as well as the readiness of some investor categories to lock in profits at current levels, are among these factors.

Fed Effect

It is worth noting that, as with the bullish move in April, Bitcoin has lost correlation with all major competitors. SPX is recovering after a correction, and codependency with precious metals tends to -1. Bitcoin is seen as a hedge against current economic events, but even BTC is affected by the Fed.

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The positive statements from Fed Chairman Jerome Powell regarding cryptocurrencies were neutralized by his commitment to the current monetary policy. As we have already noted, investors are confident in a rate hike at the July meeting. These expectations give rise to a new wave of negative analysis: HSBC reports that a recession will hit the U.S. this year, and Morgan Stanley notes the overheating of the SPX index.

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At this stage, the overall economic context does not significantly affect the cryptocurrency market, but as the Fed meeting approaches, the influence will grow. For Bitcoin and other assets, this will mean a gradual decrease in trading activity and the beginning of another period of accumulation/redistribution with a parallel decline in price.

Are crypto investors willing to settle for less?

From a fundamental point of view, Bitcoin remains a sought-after and valuable asset for long-term investors. However, increased activity is observed among certain investor categories who are likely preparing for a price decline in the medium term and are ready to lock in profits.

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First and foremost, this refers to short-term investors depositing BTC on exchanges in large numbers. However, their influence on the cryptocurrency price will not be as significant as that of miners. Over the past seven days, Bitcoin miners have sent a record $127 million worth of BTC to exchanges. Taking these facts into account, a local correction in Bitcoin can be expected in the medium term.

BTC/USD Analysis

As of June 28, Bitcoin made another attempt to break through the $31k level with daily trading volumes of $16 billion. At one point, the price reached $31k, but subsequently, sellers managed to push bulls back to the $30.5k level. As of 11:00 UTC, bears are increasing the pressure, causing BTC to decline to $30.2k.

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Technical metrics on the daily chart indicate the formation of a downward trend for BTC. The stochastic indicator is experiencing a bearish crossover, while the RSI has already exited the overbought zone and continues to decline. At the same time, the MACD is showing a flat dynamic. In the near future, Bitcoin may undergo a retest of the important support level at $29.8k–$30k.

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For Bitcoin, the current decline is a typical scenario, as bears prevail in the Asian markets. In the second half of the day, a change in intraday dynamics and a recovery in BTC/USD quotes can be expected.

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Overall, Bitcoin is actively testing the $31k level, and there are all reasons to believe that the current week will end with at least a bullish break of this level and local trading above it.

Conclusion

Bitcoin maintains its bullish potential and has every chance of completing the assault on the $31k level this week. Bearish pressure does not pose a real threat to the current range of fluctuations between $29.8k and $31.5k. However, as BTC approaches the Federal Reserve meeting and the pace of price growth slows down, the situation will change in favor of the bears.

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